Why Is Retail Merchandising Important?

Years ago I was told that merchandising and display are frivolous extra expenses for the small business owner who is just starting up. The implication was that expenses such as marketing, rent, inventory, utilities, staffing, etc. are 'serious' expenses, while merchandising and display are 'frills'.

I couldn't disagree more.

Merchandising and display are an important part of a marketing plan - even for a retailer operating on a shoestring.

In today's competitive retail environment, a retailer cannot afford to consider merchandising as a 'frill'. Everyone is competing for the customers' dollar. There are more choices out there for consumers than ever before.

With all these choices, what will grab the consumer's attention?

You've invested the money to get that expensive, high traffic location, but how will you keep the customers from walking right by your door? How will you encourage them to return? What is unique about your store? After investing money on the important priorities such as merchandise, great location, part-time staff, insurance, accountant, advertising, your carefully budgeted money can be lost if your store doesn't measure up to the customers' expectations.

Posters covering the door and windows, hand lettered signs, lack of lighting and untidy displays send the message that your business isn't serious.

If your store looks like a bargain basement, customers will expect bargain basement prices and may draw the conclusion that your product is poor quality. This judgement may have little to do with the product itself, but be the result of poor presentation.

Merchandising is more than simply the arrangement of products on the shelf. It is an integral component of the business image. It should be considered when you design your logo, business cards, brochures, letterhead, packaging, and product mix.

When you examine your merchandising, you examine what the customers' experience, from their first sight of your store front, until they leave store - hopefully with a purchase in hand. Merchandising is also about understanding the way customers shop. By using this knowledge, you can position your merchandise to increase sales.

You need to create an environment that attracts the customer, is comfortable to shop, and encourages the customer to return.

• Are the store front and windows attractive & inviting?
• Is all signage clear, professional and legible?
• Is the store interior welcoming and comfortable?
• Is merchandise presentation appealing?
• Are seasonal and high-margin merchandise placed in high profile locations?
• Overall, is the store appearance professional?

Of course, if you are on a shoestring budget, you need to start small, but make sure you include a plan for growth. One of the exciting things about retail is that it is dynamic. If you don't grow and change, customers assume you have nothing new to offer them.

You don't have to overhaul the entire store, but rotate merchandise, change displays, and change signage to make the customer feel that there is always something new for them to see or experience.

Including merchandising in your marketing plan and budget makes sense. It can make the difference between selling a product, or having it sit on the shelf.

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Shoestring Merchandising Tips for Retail Store Display

Quick tips to improve your store:

• Upgrade lighting whenever you can. Retail store windows especially need to be well lit. There are some great little halogen spotlights out there that are inexpensive and easy to install. They are terrific for highlighting display areas. Just make sure they are installed safely and the cords are unobtrusive.

• An inexpensive can of paint can be used to paint your fixtures to match, or touch up chips and keep things looking new.

• Fabric and paper are two valuable display helpers. Use them under or behind a display to provide a backdrop, use a scarf to add colour and movement to a static arrangement. To avoid a busy look, stick to a few colours and textures that complement your store design and merchandise.

• Use magazines as a source of ideas for displays. Find time to go to the library so you can browse for free. Look at do-it-yourself magazines for hardware, home decor magazines for giftware and housewares, etc. The full page ads, feature stories and new product listings are helpful.

• Take a seminar or spend a couple of hours with a retail consultant to learn some display and merchandising techniques.

• Pretend you are a customer and take a look at your storefront. Try to see the store as the customer would see it. What do you notice? Take photos to get a different perspective. Often you'll see things you didn't notice before.

• Sit down and make a list of adjectives that describe the image you want to achieve for your store. Before you make merchandising plans, check your list to stay focussed. A great idea in another store won't necessarily fit your image.

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How to Create Effective Retail Signs

Signage is one of the most important ways to convey your message to your customers. Your store name, promotions, pricing, and product information may all be conveyed through signage. Are you getting these messages across effectively?

As a customer walks by your store, you have about 3 seconds to let them know what they will find inside. What message are you sending? Professional signage will attract the customer, provide just the right amount of information and invite the customer to enter your store or try your product.

Unprofessional signage is confusing to the customer and sends a negative message about your store and product. Common problems include too many signs, ambiguous or misleading messages, spelling errors or signs that are difficult to read. I don't know about you, but I avoid stores that have have signs littered throughout the store that scream, "SALE! 9.99" and in small print at the bottom they add, "and up."

Effective signage has the following qualities:

1. Quality Production

You don't have to spend big bucks to get signs that look professional. Having said that, you still need to be willing to spend a few dollars to create the image that you want to represent your business.

Consider the lifespan of the sign. Exterior signage that needs to last several years requires a fairly large investment. The shorter the lifespan of the sign, the less it should cost. If you are running a small boutique, producing your own short term promotional or informational signage is perfectly acceptable, provided you have the tools and skills to do it well. If you are producing signs on your own, they should be produced on a computer, not handwritten. This might seem too obvious to mention, but I still see stores using signs that have been written in black felt marker. Use a desktop publishing or word processing program and quality printer and paper.

If your printer and paper are not good quality, take your computer file to a print shop to produce your image. Mount your final images on a heavy card, illustration board or foam core.

2. Simple Color Scheme

Don't go crazy with color. Pick a simple, two or three color scheme and stick with it throughout the store. Pick a background color, text color and highlight color.

Make sure that the colors have enough contrast to be easily read. Red on black, while a dynamic and high power combination, does not have enough contrast to be easily viewed. However, if the text is very large, bold and only one or two short words, you might be able to get away with it. Outlining the text with a thin white line will also improve the contrast.

Be careful with combinations such as yellow/green or orange/pink/red or green/blue. These combinations can be powerful and trendy, but require more work with design to make them legible. Strong contrasts such as white/black, yellow/black, red/white, white/blue increase visibility and legibility.

3. Easy to Read

Make your signage easy to read. Don't try to put too much on one sign. Some signs are so full of tiny images, starbursts, exclamation marks, and small print, that you can't take it all in. One main image, a headline and a few bullet points are all you need on an informational sign.

A sign in a store window should be even simpler. You need to get your message across immediately as the customer walks, or drives by. This means you can only use a strong image on your sign, a headline, or a simple combination of both. Some stores only use one word, such as 'SALE' or 'HOLIDAY' in the window, and provide more information inside the store.

The more time the customer will be spending looking at the sign, the more information you can include. For example, a sign near your cash register, where your customer will be waiting for a transaction to be processed, can provide details of a contest or return policy.

4. Clear and Simple Message

Keep your message simple. Avoid trying to say too much. Choose one main message that you want to convey.

Do you want to tell about a sale, a price, product info, return policy? Rather than say this all at once, try a sale sign on the top of the rack, price and product info on the tag, and return policy at the cash register.

When you craft your sign, write down the message you want to get across, then rewrite it in as few words as possible. Keep reducing until you have one to five words for your headline. If necessary, write a small amount of supporting information below.

5. Well Placed

Be careful where you place your signage. Place it where it will catch your customers' attention, but will not block essential elements of your store.

Think about how customers approach your store. If customers walk by your store, but your store name is only placed high up on your store front, facing the street, how will they see it? You also need to repeat the name on the door or window, and perhaps hanging from an awning or on a sandwich board on the sidewalk.

Make sure signs don't block traffic flow, displays, or the view of the interior of your store. Here's an example of signage placement that could be improved! http://www.inspire.bc.ca/articles/donotenter.html

Window signage may not be visible to customers for other reasons that you do not realize. Is there a parking meter blocking the view of your window? What about a loading zone where delivery trucks park for a large part of the day, obscuring part of your store from view?

Check for reflections on the window that make your interior signage invisible during the day. You'll need to check this at various times of the day to find out what happens to the light and reflections depending on the position of the sun. You can improve the visibility of your signage by improving the display lighting inside, and by using light colors in your windows. Light colored signage will stand out, while dark colors will recede and virtually disappear behind reflections on the glass.

After placing your signs, double check how they look from a customers point of view. Step back and approach the store as a visitor. Walk from front to back and look at all your signage critically and reposition as necessary.

Simplify, Simplify, Simplify

The simpler you keep your signage the better. Reduce visual clutter, and focus on getting your most important message across to your customer. You will attract more walk-by traffic, and avoid confusing your customer. Your sales should increase as a result.

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Create Retail Displays That Attract Customers

Retail is a competitive business. Even if your product is completely unique, you still have competition. There is always another store down the street - or in the next cyber-mall - that is aiming for your customers' wallet. Customers have a limited amount of disposable income, but their choices of where to spend it are infinite.

While there are many aspects involved in marketing and gaining customer loyalty, one of the most important is your visual presentation.

• Does your merchandise display attract and interest the customer?
• Or does it overwhelm and confuse the viewer?
• Is the display simply bland and unremarkable?

Here are some tips to help you create displays that will get the customers' attention:

1. Create a focal point

An overwhelming display or a boring one can both have the same problem - a lack of focal point.

• Where do you want your viewer to look?
• Is there one main feature you want them to notice?
• Where will the eye travel through the display? Don't leave this to chance. Plan what the customer should do when they see the display. Perhaps a new product is the main focal point, with complimentary items placed in close proximity to encourage multiple sales.

Many window and table displays are too low. The focal point should be at eye level to most viewers. Visitors will not work to get a good look at your display, they will simply walk on by without noticing.

2. Use line and shape to plan your design

Don't just put your products together willy-nilly. Practice drawing a quick layout to help you visualize the plan for your design.

• Will your layout be horizontal or vertical?
• Will the products be arranged in straight or curved lines, in a pyramid or circular shape?
• Will the design combine a variety of elements, or just one?

To experiment with this, draw rectangle that is roughly the same shape as your display space. Sketch geometric shapes such as squares, rectangles, circles, semi-circles and triangles in various combinations to get a sense of an appealing layout. For instance, a large triangle could represent an arrangement of gift ware. A long vertical rectangle to the left of the triangle would represents signage placement.

3. Create balance

Strong displays have visual balance. Dark colors appear heavier than light ones. Large objects appear heavier than small ones. This seems straightforward, but you need to think about this as you plan your display.

Generally larger, darker items would be placed near the bottom of a display, with lighter items at the top to avoid appearing top heavy. Placing too many items, or heavy looking items on one side appears unbalanced. A grouping of many items on one side of the display can be balanced by one heavy item in just the right place on the other side. Think of weights on an old fashioned scale to get an idea of how this works.

Does balance matter?

We all respond emotionally to visual stimuli. Creating a display is about creating a mood and a desire within the consumer. A lack of balance creates an impression of instability and anxiousness. The consumer is not even aware of the feeling, he or she simply searches out an environment or merchandise presentation that gives them a positive feeling and creates an appealing mood.

4. Keep it simple

Don't try to do too much. The goal is to attract attention to the product. On a slat wall, often simple rows are the best way to show the merchandise. Too often I have seen displays where every row or shelf has a different arrangement.

Your goal is to make it easy for the customer to find what they are looking for and to make sense of your product arrangement. Keep your groupings logical by grouping similar products together, with complimentary products nearby.

5. Use proper lighting

Lighting is overlooked far too often. When budgeting for store fixtures and merchandising, display lighting is not an 'extra'. Lighting your displays properly can make the difference between a display that makes people yawn, or makes them stop and look.

Displays should not be lit directly from the top, or you will get unattractive shadows. Lights should be slightly off to the side, and to the front of the display. They should enhance the 3-dimensional quality of the product. Preferably the display will be lit from more than one angle. Lighting should be adjusted every time you change your display.

If you don't have positionable lights in your key display areas, especially windows, get some as soon as possible. A good lighting store will have some for a reasonable cost and can give you advice on installing and using them.

6. Look at the display from all angles

After you have completed your display, step back and look at it. Very few people will see it standing directly in front of it. Most displays are approached from the side and seen from an angle.

Approach your display from all possible angles and view it as a customer would.

• Is your focal point still placed appropriately?
• Do you need to angle the display to the customers viewpoint?
• Is the signage visible and readable?
• Does the arrangement still appear balanced?

Observe the direction from which most customers approach the display. Make sure that the best view of the display is the one that most of the customers will see.

Putting these six tips into practice will help you create dynamic displays that attract customers.

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Are You Struggling to Merchandise Because You Don't Know the Pinwheel Concept?

You've worked hard on your business. You know your target market. You have a quality product. You've trained your staff.

For some reason, you're just not getting the response you hoped for. Customers aren't buying.

You're not sure where to turn.

What do you do next?

Do you create new displays? Put everything on sale?
Get someone to help you with merchandising?
You know you need to do something.
But what?

Before you make any decisions, you need to understand the pinwheel concept.

Have you ever played with a pinwheel?

A pinwheel has four vanes that capture wind and spin the pinwheel. In your business, the four vanes are four areas of information. This information is what you need to know to merchandise your store effectively.

The information takes the struggle out of merchandising decisions. And when you struggle less, your business starts to gain momentum. The pinwheel starts to spin.

So, what do I need to know?

First, you need to understand the four areas of the pinwheel. Then you'll learn WHY you need this information to merchandise your store. Finally, you'll discover how to use this information to make merchandising decisions.

So, let's get started.

Analyze the information in the pinwheel.

The four areas that you need to know about are:

1.Customers
2.Products
3.Sales
4.Traffic

Let's look at these in more detail. You will probably know some of this information already, but probably not all of it.

1. Customer

What do you need to know about your customer?
As much as you can. Does she shop alone, or bring a friend or family member? How often does she visit?

Find out what she likes best about your store. Her favourite products. How did she hear about your store?
If she could change something about your store, what would it be? What service could you add that she would love? What would she love to tell their friends about your store?

Customers will be happy to be asked about their opinion. Ask questions when helping them shop, use a survey or try a focus group. Take a customer or two out for coffee.

2. Products

How are your products performing?

Make it a habit to always know your highest and lowest selling products. Do some detective work on these items. Do your highest sellers have a good margin?

Study where these items are placed. Perhaps the lowest selling items are hard for customers to find. How often are products rotated and displays changed? How long has all your merchandise been in the store?
Make sure you know the competitors that offer similar products. What are the price points? How are they displayed?

3. Sales

It is important to track your sales results on a daily basis. How do your sales compare to last year? To your plan?
Know the details of your daily sales. What is the average number of items in each transaction? And the average dollar amount of each sale?

4. Traffic

Analyze your traffic. Count the number of visitors each day. Calculate your conversion rate: number of daily sales divided by number of daily visitors. Multiply this number by 100 to get the percentage of visitors that are converted to paying customers.

Watch your customers walk through the store. What attracts their attention? What do they touch? How long do they spend in the store? Where do they spend the most time in the store?

Why do you need to know these things?

The four key 'vanes' of information help your business keep moving. Without information in these areas, merchandising decisions become guesses.

If a vane of the pinwheel is missing, it doesn't spin. It turns a little. And stops. Then starts again.

To start spinning continuously, the pinwheel needs all four vanes. Once it starts moving smoothly, it gains momentum and keeps spinning.

When you start catching the information in the four areas of your business, it starts to move. A little at a time. The information you take in begins to tell you what to do.

You don't need to guess.

What the pinwheel will tell you.
(As good as a crystal ball? Almost.)

You might already be collecting this information and not using it. It's no good sitting in a report. Or a computer file. Now is the time to put it to use.

Here's what you can learn by analyzing the pinwheel information.

What merchandise to buy

Analyzing your customers' needs, feedback and top sellers to know what to buy. Focus on products that your competitors don't carry.

What merchandise to markdown and clear out

Merchandise sitting on shelves and not moving is costing you money. You are paying rent on the space it takes up. If the product is more than three months old, consider marking it down. If you've had something sitting in the store for six months to a year, move it out. Deep discount it to free up the cash for new merchandise.

Older than 1 year? Old merchandise makes the store look stale, crowded and boring. Some things may never sell. Once in a while it may be best to just pull items off the floor. If you have the space to store it, pull it out for a sidewalk or warehouse sale.

Where to place merchandise

Place high margin, strong sellers in high visibility, high traffic areas. Use these areas for new regular priced, high value merchandise.
As a general rule, put sale items at the back of the store. Customers are willing to work harder for discounts.

Use cross-merchandising and displays to encourage multiple purchases. Change displays weekly to keep merchandise fresh, and capture the interest of shoppers.

When to have promotions or events

Use your traffic analysis to plan limited time promotions or small events. Use them to boost traffic during slow times.

Use the pinwheel to find out key information about your business.

Then make a change to your merchandising. Measure the results.
If it works, do more of it.

Less struggle. More momentum.
Get that pinwheel spinning.

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